Summary of "MOT #2 - Most Influencer Marketing Is Breaking the Law (Here’s Why)"

Release Date: May 23, 2025
Podcast: Special Ops
Host: Emma Rainville
Co-Host: Ryan Potee

Introduction

In the second episode of "Marketing on Trial," a spin-off of the Special Ops podcast hosted by Emma Rainville and co-hosted by attorney Ryan Potee, the discussion centers on the legal pitfalls prevalent in influencer marketing. The episode delves into why most influencer marketing strategies are inadvertently violating Federal Trade Commission (FTC) regulations and offers actionable insights for brands to ensure compliance.

The Current Landscape of Influencer Marketing

Emma and Ryan kick off the conversation by highlighting a startling revelation: "Did you know most influencer marketing is not legal? Brands are paying influencers without proper disclosures, and the FTC is coming after them" (02:28). This sets the stage for an in-depth exploration of the legalities surrounding influencer collaborations.

FTC Regulations and the Importance of Compliance

Ryan underscores the significance of the FTC's trade regulation rules on consumer reviews, endorsements, and testimonials. He emphasizes that while compliance might seem daunting, "it’s really easy to comply with. It’s just people do it incorrectly all the time" (01:28). The discussion points out that many brands naively assume that simply relying on platform-specific disclosures or trusting influencers to adhere to guidelines is insufficient.

Common Non-Compliant Practices in Influencer Marketing

The hosts provide three illustrative examples showcasing non-compliant influencer activities:

1. Hotel Partnerships Without Disclosure:
   Emma narrates a scenario where a hotel offers an influencer free amenities in exchange for promotion but fails to ensure proper disclosure. Ryan clarifies, "That's going to be at the influencer. Because at that point, if you're talking to regulators, it's like we're trying to actively get this down" (08:46).

2. Donut Shop Promotions:
   An influencer gifted free donuts in exchange for a TikTok review without disclosing the sponsorship, potentially leading to trouble with the FTC.

3. High-Profile Celebrity Endorsements:
   While high-profile influencers like George Clooney or the Kardashians often comply due to their visibility, Ryan cautions that "partner is not enough" (05:52)—meaning mere partnership mentions aren’t sufficient without clear disclosures.

Best Practices for Disclosures

Proper disclosure is paramount. Ryan outlines effective methods:

• In-Build Platform Features:
  Utilizing built-in features like Instagram's "Paid Partnership" tag ensures visibility, as "it is very clear when you're using a paid partnership... you can't actually get to what they're saying without missing that" (07:58).

• Natural Integrations:
  Integrating disclosures organically within the content, such as "I partnered with [Brand]" or "I get paid to use this product," maintains authenticity while adhering to regulations.

Emma adds, "I would choose my way where the person is disclosing in a way that's letting their audience who loves them know that they love the product while still disclosing it" (07:26), emphasizing the balance between transparency and engagement.

Risks and Liabilities

The conversation shifts to the potential risks both brands and influencers face due to non-compliance:

• Brand Liability:
  If an influencer fails to disclose sponsorships properly, the brand is often held liable, even if the contract stipulates the influencer's responsibilities. Ryan reiterates, "practically it's going to be the brand every time" (08:14).

• Influencer Accountability:
  Influencers may also face penalties if they knowingly or unknowingly violate disclosure requirements.

Recommendations for Brands

To mitigate risks and ensure compliance, Ryan proposes a three-step strategy for brands:

1. Ensure Product Use:
   Verify that influencers genuinely use and endorse the product. "They have to use the product at least once" (09:13).

2. Mandate Clear Disclosures:
   Include explicit material connection disclosures in contracts, guiding influencers on how to present disclosures in their content.

3. Implement Tracking and Auditing:
   Establish systems to monitor and review influencer content regularly, ensuring adherence to disclosure guidelines.

Emma contributes by suggesting, "I would spend money on this every day... to be extremely upfront," highlighting the importance of consistent and prominent disclosures to maintain trust and compliance (06:17).

Notable Quotes

• Emma Rainville:
  "Did you know most influencer marketing is not legal? Brands are paying influencers without proper disclosures and the FTC is coming after them." (02:28)

• Ryan Potee:
  "Partner is not enough. To make a material connection disclosure, there's really two portions." (05:55)

• Emma Rainville:
  "I think that would be way higher converting than these written disclosures above the fold." (12:55)

Conclusion

Emma and Ryan conclude the episode by reiterating the critical importance of compliance in influencer marketing. They emphasize that maintaining transparency not only avoids legal repercussions but also fosters authentic relationships with audiences. The hosts remind listeners about their Influencer Compliance Checklist available for free, providing a practical tool to navigate the complexities of influencer collaborations effectively.

Additional Resources

• Free Downloadable Playbook:
  For actionable strategies discussed in the episode, download the Influencer Compliance Checklist here.

• Subscribe to Special Ops:
  Stay updated with the latest episodes by subscribing on Apple Podcasts, Spotify, or YouTube.

By addressing the legal intricacies of influencer marketing, this episode equips brands and influencers with the knowledge to navigate and thrive in the ever-evolving digital landscape responsibly.